Question 1.

What was the focus of the economic policies pursued by the colonial
government in India? What were the impacts of these policies?
Answer. The economic policies pursued by the colonial government in India were
concerned more with the protection and promotion of the economic interests of their home
country rather than with the development of the Indian economy.
Thus, at the time of independence in 1947, India was a poor and underdeveloped country.
At that time, agriculture was in a poor condition and mineral resources were not fully used.
There were only a few industries and many of the cottage and small-scale industries had
declined under the British rule. Millions of people were unemployed, not because they were
unwilling to work but because there were no jobs to be found. The per capita income of
Indians was one of the lowest in the world, indicating that the average Indian was extremly
poor and could not afford even the basic necessities of life. For instance, the staple food of
average Indian consisted of rice, wheat and millets (like jowar and bajra). Most Indians could
not afford to buy nutritious and balanced diet. The vast majority of people in India led a
miserable life.
Question 2. Name some notable economists who estimated India’s per capita income
during the colonial period.
Answer. Dadabhai Naoroji, V.K.R.V. Rao, Wiliam Digby, Findlay Shirras and R.C. Desai.
Question 3. What were the main causes of India’s agricultural stagnation during the
colonial period?
Answer. Indian agriculture was primitive and stagnant. The main causes of stagnation of
agriculture sector were as follows:

1. Land Tenure System. There were three forms of Land tenure system introduced by
the British rulers in India. These were:
(a) Zamindari system
(b) Mahalwari system
(c) Ryotwari system
In the Zamindari system, Zamindars or landlords were the owners of land. The actual
collections by Zamindars was much higher than what they had to pay to the
Government. Zamindari system led to multiplication of middlemen between cultivators
and Government, absentee landlordism, exploitation of peasants by unsympathetic
agents and enmity between landlords and tenants. Under the system, intermediaries
benefited at the cost of both actual cultivators and the state.
2. Commercialisation of Agriculture. Commercialisation of agriculture means production
of crops for sale in the market rather than for self consumption. Farmers were forced to
cultivate commercial crops like Indigo. Indigo was required by the textile industry in
Britain for dyeing of the textile. As a result, there was fall in the production of food
crops. The farmers had to suffer from frequent occurence of famine. Indian agriculture
was transformed into a raw material exporting sector for England.
3. Partition of the Country. Partition of the country in 1947 also adversely affected India’s
agricultural production. The rich food producing areas of West Punjab and Sindh went
to Pakistan. It created food crisis in the country. Also, the whole of fertile land under
jute production went to East Pakistan. The jute industry was most severely affected
due to partition.
Thus, Indian agriculture became backward, stagnant and non-vibrant under the British
rule. Indian Economy on the Eve of Independence

Question 4. Name some modem industries which were in operation in our country at
the time of independence.
Answer. The Tata Iron and Steel company (TISCO) was incorporated in August 1907 in
India. It established
its first plant in Jamshedpur (Bihar). Some other industries which had their modest beginning
after Second World War were: sugar, cement, chemical and paper industries
Question 5. What was the two-fold motive behind the systematic de-industrialisation
effected by the British in pre-independent India?
Answer. De-industrialisation-Decline of India Handicraft Industry. Britishers followed the
policy of systematically de-industrialising India. The primary motive behind the de-
industrialisation by , the British government was two-fold:

1. to get raw materials from India at cheap rates in order to reduce India to a mere
exporter of raw materials to the British industries.
2. to sell British manufactured goods in Indian market at higher prices.In this way, they
exploited India through the device of double exploitation

Question 6. The traditional handicraft industries were mined under the British mle. Do
you agree with this view? Give reasons in support of your answer.
Answer. The main cause of exploitation of traditional handicraft industries was de-
industrialisation introduced by British rulers in India. They got raw materials from India at
cheap rates and reduced India to a mere exporter of raw materials to the British industries.
They sold British manufactured goods in Indian market at higher prices.
It resulted in decline of world famous traditional handicrafts. Britishers followed discriminatort
tariff policy. It allowed free export of raw materials from India and free import of British final
goods to India, but placed heavy duty on the export of Indian handicrafts. In this way,
Indian . markets were full of manufactured goods from Britain which were low priced. Indian
handicrafts 1 started losing both domestic market and export market. Ultimately, the
handicraft industry declined.
Question 7. What objectives did the British intend to achieve through their policies of
infrastructure development in India?
Answer. During the British rule, some basic infrastructure was developed in the form of
railways, water transport, ports, post and telegraph, etc. However, the real intention behind
these developments 1 was to serve their own colonial interest.
The main motives of British rulers behind the development of infrastructure in India were:

1. To have effective control and administration over the vast Indian territory. For this,
Britishers linked important administrative and military centres through railway lines.
2. To earn profits through foreign trade. For this they linked railways with major ports and
the marketing centres (or Mandies).
3. To create an opportunity for profitable investment of British funds in India.
4. To mobilise army within India and carrying out raw materials through roads to the
nearest railway station or to the port to send it to Britain.

Question 8. Critically appraise some of the shortfalls of the industrial policy pursued
by the British. colonial administration.
Answer. The state of Indian industrial sector on the eve of independence was as follows:

1. De-industrialisation—Decline of Indian Handicraft Industry. Britishers followed the

policy of systematically de-industrialising India. The primary motive behind the de-
industrialisation by the British government was two-fold.
(a) to get raw materials from India at cheap rates in order to reduce India to a mere
exporter of raw materials to the British industries.
(b) to sell British manufactured goods in Indian market at higher prices.
 In this way, they exploited India through the device of double exploitation. It resulted in
decline of world famous traditional handicrafts. Britishers followed dis-criminatory tariff
policy. It allowed free export of raw materials from India and free import of British final
goods to India, but placed heavy duty on the export of Indian handicrafts. In this way,
Indian markets were full of manufactured goods from Britain which were low priced.
Indian handicrafts started losing both domestic market and export market. Ultimately,
the handicraft industry declined.
2. Lopsided Modem Industrial Structure. Unbalanced and lopsided structure of Indian
industries is again a legacy of the British rule in India. British rulers neither permitted
modernisation of industries nor did they encourage the growth of heavy industries in
India. The period 1850-55 saw the establishment of the first cotton mill, first jute mill
and the first coal mine. By the end of 19th century, there were 194 cotton mills and 36
jute mills. The cotton textile mills were located in the western parts of the country, in
the states of Maharashtra and Gujarat.
Jute mills in BengaT were established mainly by British capitalists. First iron and steel
industry during British rule was Tata Iron and Steel company (TISCO) incorporated in
August 1907 in Jamshedpur (Bihar). Some other industries which had their modest
beginning after Second World War were: sugar, cement, chemical and paper
industries.
3. Capital Goods Industries were Lacking. The policy of Britishers was simply to develop
those industries which would never be competitive to the British industry. They always
wanted Indians to be dependent on Britain for the supply of capital goods and heavy
equipments. Thus, the development of a few consumer goods industries was
witnessed during the British rule. The heavy industries were, by and large,
conspicuous by their absence. This resulted in an unbalanced and lopsided growth of
industries in India.
4. Limited Operation of the Public Sector. Public sector was confined to railways,
power generation, communi-cation, ports and some other departmental under-takings.

Question 9. What do you understand by the drain of Indian wealth during the colonial
period?
Answer. Drain of wealth means that economic policies of the British in India were primarily
motivated to snatch maximum benefits from India’s trade. India’s foreign trade generated
large export surplus. This export surplus did not result in any flow of gold or silver into India.
There was drain of India’s wealth into Britain. It is clear from the following facts :

1. The surplus was used to make payments for the expenses incurred by the office set up
by the colonial government in Britain.
2. The surplus was used to pay expenses on war fought by the British government.
3. Surplus was used to pay for the import of invisible items.

Question 10. Which is regarded as the defining year to mark the demographic
transition from its first to the second decisive stage?
Answer. 1921 is the defining year. It is called ‘Year of Great Divide’.

Question 11. Give a quantitative appraisal of India’s demographic profile during the
colonial period.
Answer. The demographic condition on the eve of independence was as follows:

1. High Birth Rate and Death Rate. High birth rate and high death rate are treated as
indices of backwardness of a country. Both birth rate and death rate were very high at
48 and 40 per thousand of persons res-pectively.
2. High Infant Mortality Rate. If refers to death rate of children below the age of one year.
It was about 18 per thousand live births.
 3. Low Life Expectancy. Life expectancy means the number of years that a new bom
child on an average is expected to live. It was as low as 32 years.
4. Mass Illiteracy. Mass illiteracy among the people of a country is taken as an indicator
of its poverty and backwardness. The population census of 1941 (which was the last
census under the British rule) estimated the literacy rate at 17 per cent. This means
that 83 per cent of the total population was illiterate.
5. Low Standard of Living. At the time of independence, people used to spend between
80 to 90 percent of their income on basic necessities, that is on food, clothing and
housing. Even then, people did not get adequate quantity of food or clothing or housing
and millions of people starved, went naked and lived in huts or in the open. Moreover,
some parts of India came under severe famine conditions. The famines were so severe
that millions died. One of the worst famines in India was the Bengal famine of 1943,
when three million people died.

Question 12. Highlight the salient features of India’s pre-independence occupational

structure.
Answer. Occupational structure means the distribution of work-force among different sectors
of an economy. The state of occupational structure on the eve of independence was as
follows:

1. Pre-dominance of Agriculture Sector. The agricultural sector accounted for the largest
share of work-force, which was 72 per cent. The manufacturing and service sectors
accounted for 10 per cent and 18 per cent respectively.
2. Growing Regional Variations. There was growing regional variation. In the states of
Tamil Nadu, Andhra Pradesh, Kerala, Karnataka, Maharashtra and West Bengal, the
dependence of the workforce on the agricultural sector declined. On the other hand,
there was increase in the share of work force in the agriculture sector in the states of
Orissa, Rajasthan and Punjab.
Thus, India’s occupational structure was static and imbalanced.

Question 13. Underscore some of India’s most crucial economic challenges at the
time of independence.
Answer. Most crucial economic challenges at the time of independence were:

1. Little industrialisation and decline of handicrafts.

2. Low agricultural output and high imports of grains.
3. Low figure of national income and per capita income which showed extreme poverty.
4. Very sluggish economic progress.’
5. Unemployment and underemployment.
6. Very high infant mortality rate, low life expectancy and low standard of living.

Question 14. When was India’s first official census operation undertaken?
Answer. First official census was undertaken in the year 1881.

Question 15. Indicate the volume and direction of trade at the time of independence.
Answer. India has been an important trading nation since ancient times. But the restrictive
policies of commodity production, trade and tariff pursued by the British government
adversely affected the structure, composition and volume of India’s foreign trade. The state
of India’s foreign trade on the eve of independence was as follows:

1. Net Exporter of Raw Material and Importer of Finished Goods. India became an
exporter of primary products such as raw silk, cotton, wool, sugar, indigo, jute, etc. and
an importer of finished consumer goods like cotton, silk and woollen clothes and capital
 goods like light machinery produced in the factories of Britain. UK was the chief
supplier to India contributing to over 31 per cent of total import at the time of
independence. The principal item of import was food grains and by 1947 food grain
imports had touched the level of 3 million tonnes.
2. Britain had Monopoly Control on Foreign Trade. Opening of Suez Canal in 1869
served as a direct route for the ships operating between India and Britain. The canal
connected Port Said on the Mediterranean Sea with the Gulf of Suez. It provided a
direct trade route for ships operating between European or American ports and ports
located in South Asia, East Africa and Oceania.
It reduced the cost of transportation and made access to the Indian market easier. In
other words, the exploitation of Indian market was now easier. British maintained
monopoly control over India’s foreign trade. More than half of India’s foreign trade was
with Britain. British allowed trade with few other countries like China, Ceylon (Sri
Lanka) and Persia (Iran).

Question 16. Were there any positive contributions made by the British in India?
Discuss.
Answer. British rule exploited India in many ways. But, the ways to achieve the motives
sometimes yield positive effects. Their exploitative programmes and policies resulted in
some positive impact on India. Some of these positive effects were:

1. Commercialisation of agriculture implied a good breakthrough in agriculture and

resulted in self-sufficiency in fiSodgrain production.
2. The development of infrastructure, railways and roadways generated new
opportunities for economic and social growth and broke cultural and geographical
barriers.
3. Railways promoted commercialisation of agriculture through long distance movement
of goods and it enabled people to move from one place to another easily.
4. The supply of food and essentials could be made available to drought affected areas
through transportation.
5. Indian economy witnessed a huge expansion of monetary system and growth in
production through division of labour and specialisation.

Answers
1.
b. National incomePopulation of the country× 100National incomePopulation of the country×
100
Explanation: Per capita income, also known as income per person. It is calculated
by national income and dividing it by the total population.
2.
b. Rate of growth
Explanation: The real economic growth rate is expressed as a percentage that
shows the rate of change for a country’s GDP from one period to another,
typically from one year to the next.
3.
 d. 1853
Explanation: The first passenger train in India ran between Bombay (Bori Bunder)
and Thane on 16 April 1853.
4.
c. Green NNP = NNP – Net fall in the stock of natural capital
Explanation: ”Green NNP” is a national accounting concept that subtracts off
from GNP not just. depreciation of capital, but also depletion of environmental
assets.
5. Low output per hectare of land is called Low productivity.
6. The volume and direction of trade at the time of Independence are indicated below:
i. India was a major exporter of raw material such as wool, sugar, cotton, jute, raw
silk, indigo etc. at the time of Independence.
ii. India used to import finished consumer goods such as silk, light machinery and
cotton from factories of Britain.
iii. More than half of India’s foreign trade was restricted to Britain while the rest was
targeted to countries like China, Ceylon (Sri Lanka) and Persia (Iran).
2. Economic structure is a term that describes the changing balance of output, trade,
incomes and employment drawn from different economic sectors – ranging from
primary (farming, fishing, mining etc) to secondary (manufacturing and construction
industries) to tertiary and quaternary sectors.
3. The main cause of food shortage in India after partition was that the food surplus
areas of West Punjab and Sindh went to Pakistan.
4. During British rule India was in first stage of demographic transition. In this stage
India’s birth rate as well as death rates were very high counter balancing each other
and thereby keeping the growth rate of population to be low. It is not so that British
made any effort for controlling India’s population. It was due to their utter ignorance
that health facilities were extremely poor making death rates high and population
growth rate slow.
5. India’s foreign trade under the British rule is described as below:Thus, India was
reduced to being a source of food for the British, a supplier of raw materials for the
British industries and a market for their finished products.
i. India exported raw materials to the home country of the British for their
expanding industries.
ii. The British followed a typical colonial pattern of trade in India, where it was made
to serve their interests.
iii. India was also developed as a market for the finished goods of the British
industries.
6. The occupational structure, which refers to the distribution of population working in
different sectors, showed no variation throughout the British rule. The following are
the salient features of India’s pre-independence occupational structure
 i. Predominance of agriculture: Under the colonial rule, India was basically an
agrarian economy, with nearly 70.75% of its workforce engaged directly or
indirectly in agriculture. Due to massive poverty and widespread illiteracy during
the colonial rule, a large proportion of the population was engaged in farming
and related activities to earn their subsistence. But agricultural sector suffered
from low productivity and, thereby its growth was highly constrained despite
employing a significant proportion of the population.
ii. Lack of Opportunities in Industry: Only a small proportion of population was
employed in manufacturing sector. Nearly 10% of the total workforce was
engaged in manufacturing and industrial sector. This was due to the stiff
competition that the Indian industries faced from the machine made cheap goods
from Britain, Further, the lack of investment initiatives and the unfavourable tariff
structure constrained industrial sector. Thus, the Indian industrial sector failed to
provide significant employment opportunities.
7. The founding stone of one of the largest railway networks in the world was laid by
the British. Most of the central stations were the work of the British Infrastructure.
Indian Railways is very large and complex, it connects several distant regions of the
country, it’s the primary form of transportation. Thus we can say that railways were
intended to serve only British interests, but it is proving useful to each and every
Indian.
8. State of industries in India on the eve of Independence is explained below :
i. The role of the public sector in development of industries was restricted to the
railways, power generation, communications, ports and some other departmental
undertakings. There was no growth of industrial base in India.
ii. Before the advent of British in India, the traditional handicraft industries enjoyed a
world wide reputation for their quality and standards of craftsmanship.
iii. There were hardly any capital goods industries to promote further
industrialisation, since the British had no interest in the development of Indian
economy.
9. The railways affected the structure of the Indian economy positively in the
following ways:
i. It enabled people to undertake long distance travel and thereby break
geographical and cultural barriers.
ii. Railways enabled the government to supply food grains speedily to famine
affected areas.
iii. It fostered commercialisation of Indian agriculture as agricultural produce could
be sent to distant places. Farmers started viewing agriculture as a business rather
than a way of subsistence.
The railways affected the Indian economy negatively in the following ways:
i. Commercialisation of agriculture affected the self-sufficiency of the rural areas.
ii. It enabled the goods from British factories to be transported to various parts of
the country, thereby expanding their market.
 iii. It facilitated the transport of raw materials to the port cities and ensured their
easy exportability.
10. The focus of the industrial policies pursued by the colonial government in India was
to make our country a mere supplier of Britain’s own flourishing industrial base. The
policies were concerned mainly with the advancement of the British economic and
political power. The industrial policy pursued by the British colonial administration
had the following shortfalls:
i. Neglect of Indian Handicraft Industries: The British followed a discriminatory tariff
policy under which they imposed heavy tariffs (export duties) on India’s export of
handicraft products while allowed free export of India’s raw material to Britain
and free import of finished products from Britain to India. This made Indian
exports costlier and its international demand fell drastically loading to the
collapse of handicrafts industries. Also, Indian handicrafts faced stiff competition
from machine-made textiles of Britain.
ii. Lack of Investment in Modern Indian Industries: The modern industries in India
demanded investments in capital goods and technology that were beyond the
means of Indian investors. British Government was least interested in investing in
Indian industries as they never wanted India to become self reliant. Thus due to
the lack of sufficient investment, the growth of Indian industries was severely
constrained.